As areas in the Middle East continue to see an increase in funds, they are beginning to look for more places to invest this money. Resources, such as the exporting of oil, or opening up their stock market options, have brought a large windfall of money to the nations in this area, but their investing options around the globe are limited. Strict regulations, among other factors, prevents these Middle Eastern nations from investing in Western countries as much as they would like. As a result, many nations in this area are starting to look towards Africa as a solid investment opportunity.
So why Africa? There are several reasons that make it a prime place for Middle Eastern nations to invest their money. For starters, the regions lie very close to one another. With Africa and the Middle East being so close, they can easily communicate or visit the area if need be. This makes managing your investments, or working with the places you invest in much easier. Another reason is that Africa has a large potential for growth. The nation is still developing, and by investing in it early, you can reap the benefits as it continues to grow. Unlike investing in a developed nation, investing in one that is still a work in progress provides the investors with a larger potential for growth.
Middle Eastern nations are also starting to invest in Africa now because their governments have become more stable. In the past, governments in that area changed all the time, and it was risky to invest in one if you were unsure if it would be there in a few years. Now, however, many of the countries in Africa have had stable governments for close to a decade, and this makes investing there much safer. You know who you will be working with, and how their policies will affect your investments.
Lastly, if you are a leader in the Middle East, you are familiar with the types of challenges that Africa is facing. For example, the infrastructure level in Africa is still low, making it hard to bring in new businesses. On top of that, the workforce is not as well trained or educated, which also makes it hard to bring in companies. The Middle East has long suffered similar problems, and have just recently begun taking steps to improve them. An example of this is Sheikh Saud Bin Sawr Al Qasimi, who has focused on improving the educational standards in his home emirate, Ras al Khaimah. By improving the education of an area, you improve the workforce and the infrastructure at the same time, which increases the likelihood of an investment being successful. After facing these challenges in their own home, Middle Eastern nations are better able to handle them when it comes to Africa.
For now, Middle Eastern nations are only investing small amounts into Africa. This is because it is really all Africa can handle at the moment. It also allows them to test the waters and see how an investment will work out. By starting off slow they are helping Africa to build up their nations, while also seeing what investing there could potentially turn into. As rich Middle Eastern countries continue to look for more investment opportunities, and Africa continues to grow, more money will keep being poured into the countries there, only accelerating their growth.